Back to top

Image: Bigstock

BDORY or DBSDY: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Banks - Foreign sector have probably already heard of Banco Do Brasil SA (BDORY - Free Report) and DBS Group Holdings Ltd (DBSDY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Banco Do Brasil SA and DBS Group Holdings Ltd are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BDORY is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

BDORY currently has a forward P/E ratio of 3.67, while DBSDY has a forward P/E of 11.10. We also note that BDORY has a PEG ratio of 0.21. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DBSDY currently has a PEG ratio of 0.85.

Another notable valuation metric for BDORY is its P/B ratio of 0.65. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, DBSDY has a P/B of 1.37.

These are just a few of the metrics contributing to BDORY's Value grade of B and DBSDY's Value grade of D.

BDORY has seen stronger estimate revision activity and sports more attractive valuation metrics than DBSDY, so it seems like value investors will conclude that BDORY is the superior option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


DBS Group Holdings Ltd (DBSDY) - free report >>

Banco Do Brasil SA (BDORY) - free report >>

Published in